In January 2011, the Governor announced his intent to eliminate redevelopment agencies as a
way to help balance the State budget. The Legislature later enacted, and the Governor signed,
ABx1 26 (dissolution of redevelopment agencies) and ABx1 27 (allowing redevelopment agencies to continue with voluntary payments to the State). These bills took effect on June 29, 2011.

Many believed these bills violated a number of provisions in the California Constitution, including the recently enacted Proposition 22, so the California League of Cities and the California Redevelopment Association filed suit in the California Supreme Court challenging the constitutionality of these bills. On August 11, 2011, the Supreme Court agreed to take the case and issued partial stays of both
ABx1 26 and ABx1 27.

On December 29, 2011, the California Supreme Court announced its ruling to uphold ABx1 26 , but overturned and invalidated ABx1 27, essentially dissolving all redevelopment agencies in California on February 1, 2012.